Pritzker proposes $56B budget with minimal new spending, tax on social
media companies
[February 19, 2026]
By Ben Szalinski
SPRINGFIELD — As Illinois awaits court decisions about federal funding
cuts and braces for even further cuts amid rising costs, Gov. JB
Pritzker is proposing limited new spending — and yearning for “normal
problems.”
The governor delivered the final budget address of his second term on
Wednesday, proposing a spending plan that largely maintains the status
quo and forgoes significant broad-based tax increases.
Pritzker also accused the Trump administration of costing Illinois
billions of dollars in lost revenue via cuts or policy changes.
“I have joked with many of you that I wish I could spend just one year
of my governorship presiding over precedented times,” he told the joint
session of the General Assembly.
He said the proposed $56 billion fiscal year 2027 budget required him to
make hard choices, but he argued it is ultimately the best path for the
state to navigate its way through uncertainty driven by Washington.
“It levels off and in some cases reduces programs that are important to
me — some of which were proposals of my own,” Pritzker said. “But I
believe that the imperative of responsible governance and overcoming the
fiscal irresponsibility of past decades must come ahead of the interest
of any one politician, program or party.”
The proposal represents an increase of $878 million, or 1.6%, from the
current year. But most of that news spending is in required categories
like education and pensions. Outside those areas, new spending will grow
by just 0.5%.
On the revenue side, the governor is expecting $56.1 billion in FY27,
which would be an increase of $830 million from current-year
projections.
Like the last two budgets, Pritzker is again opting for targeted tax
increases that will be paid by businesses rather than consumers. His
proposal does not include new taxes on millionaires and billionaires and
corporations sought by progressive Democrats. Instead it would tax
social media companies, raising a projected $200 million in revenue.
Tax on social media companies
Pritzker’s plan calls for raising $589 million in new revenue.
The hallmark of the plan is a new tax on social media companies with at
least 100,000 users in Illinois. The companies would be taxed on a
graduated scale beginning at 10 cents per user each month. Platforms
with a million or more users would be taxed $165,000 each month, plus 50
cents each month on the number of users over a million.
Pritzker is hoping to raise $200 million from the new tax — a more
limited amount than a digital advertising tax floated last year that
would have racked in hundreds of millions of dollars each year.
“Social media algorithms have been proven to create mental health issues
in adolescents and foster polarization and misinformation in society as
a whole,” Pritzker said. “Those companies are profiting from online
engagement of Illinois consumers, and they currently contribute nothing
to ameliorate the negative effects of their platforms.”
Pritzker’s plan would also raise new funds by adjusting a cap on
operating losses reported by businesses and aligning taxes on table and
electronic games with each other.
Budget officials in the governor’s office also said they aren’t assuming
the worst-case economic scenario in FY27. They said the budget is based
on S&P Global’s January outlook, which shows a stable forecast that
assumes personal consumption will continue to grow, corporate profits
will remain flat and the economy won’t be plunged into a recession.
For the current fiscal year, the governor’s office expects revenue to be
about $70 million lower than was first projected when Pritzker signed
the budget last June.
Federal uncertainty
Pritzker’s administration is also assuming it will win court battles to
continue receiving federal funding that President Donald Trump’s
administration has attempted to cut. About $1 billion in child care
funding is currently in limbo as the state sues to continue receiving
funding, according to the governor’s office.
Pritzker said when Trump took office, he was hopeful the election-year
threats to gut programs were “the kind of unrealistic hyperbole that
fuels a presidential campaign but then is abandoned when cooler heads
prevail.”
Instead, the president stuck to those pledges — and Pritzker pegged the
fallout at $8.4 billion for the state.
“These are not handouts,” he said. “These are dollars that real
Illinoisans paid in federal taxes and that have been constitutionally
approved by our elected Democratic and Republican representatives in
Washington.”
The governor, who many speculate will run for president in 2028,
admonished the Trump administration for denying disaster relief funding
to Illinois and instead requiring the state to paint over any rainbow
crosswalks in Chicago.
“I want to say to anyone on either side of the aisle: If you want to
talk about our FY 2027 budget, you must first demand the return of the
money and resources this president has taken from the people of
Illinois,” Pritzker said.
But the governor’s budget office also projects the state will face
multibillion dollar deficits in the coming years as more cuts and new
requirements for social services passed by Congress take effect.
Pritzker told reporters on Wednesday following the speech that new
spending on hiring and software included in his budget proposal is
“building that infrastructure in order to deal with future years and
making sure that we don’t get hit even harder.”
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JB Pritzker delivers his annual budget address on Wednesday, Feb.
18, 2026. (Capitol News Illinois photo by Jerry Nowicki)
Little new education spending
While overall spending in the budget would grow by hundreds of millions
of dollars, lawmakers and advocates who wanted Pritzker to propose
spending big chunks of money on new services this year did not have
their wishes granted.
But the governor’s office said the proposal also does not include major
cuts to programs.
Funding for K-12 public schools via the state’s Evidence-Based Funding
formula would increase by $305 million and, for the second year in a
row, exclude roughly $50 million that would be designated for property
tax relief.
Advocates, including teachers unions, have implored state lawmakers to
significantly boost EBF funding, arguing the formula is not doing enough
to direct necessary dollars to the state’s neediest school districts.
Budget officials in the governor’s office said they believe the state is
still maintaining progress toward improving funding for those schools.
“I 100% agree that we need a bill that equitably distributes money to
the schools and that we need more to go to our universities,” Pritzker
told reporters. “The principles are all there. I think there are some
tweaks and some questions that we need to get answered before we can get
into a final result.”
Other new spending for education this year includes $35 million to the
Illinois Department of Transportation that would go toward helping mass
transit districts provide transportation for students to and from
school.
Fiscal year 2027 will also be the first year the new Department of Early
Childhood begins full operations. Funds previously allocated through the
State Board of Education, Department of Human Services and Department of
Children and Family Services will be consolidated under one roof,
totaling $2.1 billion in General Fund spending for the new agency.
The state’s universities and community colleges will also see just 1%
growth in spending for the second year in a row under the plan. The
Monetary Award Program, more commonly known as MAP, will have funding
remain flat at $721.6 million.
Other spending areas
A program that provides health care to immigrant seniors regardless of
whether they’re living in the U.S. with legal permission is also
remaining in the budget, despite pushback from Republican lawmakers.
The program was significantly scaled back in the FY26 budget and limited
only to qualifying seniors and is projected to cost $143.6 million in
FY27. Last year’s budget cut a similar program for immigrant adults.
Funding for Home Illinois, the state’s homelessness prevention program,
is proposed to remain flat at $253.7 million after being reduced by
about $15 million in the current year.
The Department of Children and Family Services would see an increase of
$74 million, or 4.7%, in Pritzker’s proposal. It would boost support for
caregivers and intervention services.
Pritzker also proposed allocating $2 million to fund two new classes to
train 100 new state troopers. The Department of Corrections would also
get $103 million in new funding to add new administrative positions and
100 correctional officers.
The state is also expected to spend $100 million beginning in the
current fiscal year on new staffing and technology costs to implement
new requirements from the president’s domestic policy bill that was
signed last summer.
Pensions would also be fully funded with $10.7 billion as Pritzker
continues to pitch the General Assembly on supporting a pension reform
plan.
Local governments might get a smaller cut of revenue, however. The
governor proposed lowering the percentage of income taxes that goes to
local governments to 6.23%. That would keep $60 million in state
coffers, budget documents show.
The “rainy day” fund, on the other hand, would increase by $176 million,
bringing it to roughly $2.5 billion.
Policy priorities
A year after delivering a politically heavy speech that focused on
Trump’s return to power, Pritzker focused much of this year’s speech on
his legislative agenda for the spring.
Pritzker’s nonbudgetary proposal included:
A ban on “junk fees,” or the advertisement of a price that doesn’t
disclose all fees.
Statewide zoning laws and capital funding to spur housing development.
A renewal of a community college bachelor’s degree proposal that stalled
last year.
A ban on cell phones in schools, also revived from a year ago.
An executive order aimed at spurring new nuclear power development.
The “Children’s Social Media Safety Act” to increase parental controls,
regulate how content is packaged to children and require social media
companies to increase privacy settings on children’s accounts.
A moratorium on tax credits for data centers.
Jerry Nowicki contributed.
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